In the midst of the civil war that engulfed Iraq in recent years, the Iraqi Army fought long and hard to fend off the threat from the Islamic State in the south-east region of the country, which not only holds the largest reserve of oil in Iraq, but also opens up to Iraq’s port in the Persian Gulf, which is a crucial point for trade. Though the Iraqi Army was successful in ridding the oil fields of the ISIS threat, it could be contended that this victory, though significant, is temporary. The group managed to invade some regions containing oil reserves in the north of the country. Iraq has the second largest oil reserves in the world, is a significant member of OPEC, and a significant proportion of its economy relies on oil rents. As of 2015, Iraq’s oil rent as a share of GDP was more than 25%. Thus, losing even a small portion of it to extremist groups like ISIS, spells disaster, not only for the economy and security of Iraq but also the rest of the world. In 2014, however, ISIS gained access to oil reserves of about 80,000 barrels per day and produced about 40,000 barrels per day. But why is a radical extremist group, like ISIS, interested in producing oil?
Oil has a lot to offer to an extremist group. However, it is important to note that the relation between access to oil and the group’s power is not direct. Nevertheless, it is worthwhile to consider this relation, particularly as it may affect future counterinsurgency strategies, security as well as energy security in the region. Firstly, not only does the sale and trade of such a valuable resource deepen their pockets, but it also provides them legitimacy, as they gain international recognition. With recognition comes more trading partners, bringing with them a wealth of financial resources for the group. Financial resources then allow for the expansion of their weapon and vehicle inventory. With more vehicles, they are able to travel greater distances, expanding their territory and parading their wider variety of weapons. By parading their increased wealth of weapons, through expanded territory, they are essentially attempting to showcase their power, arguably in an effort to gain more power. In a war-torn region occupied by multiple militant groups, any given individual is more likely to join a group that appears powerful relative to the other groups operating in the region. This, thereby, further increases the power of the group, as they are then able to recruit more militants. Therefore, in the short-run, access to oil could help a group like ISIS gain more power. Moreover, once they get more recruits, they are able to maintain the manpower in the group by paying the militants well and avoiding the collection of taxes from their recruits, as oil money replaces the necessity to tax. Taxation usually reduces support for militant groups. Thus, by reducing or eliminating taxes, more people, especially opportunists are likely to join. As more opportunists join, they can be paid to rough up or intimidate civilians indiscriminately so as to coerce more people to support, join, or engage in activities that favor the group. Thus, access to natural resources could increase violence against civilians. However, this reduces support for the group in the long run, as fewer individuals are willing to cooperate with groups which have done them wrong. Thus, while it appears that access to oil provides nearly everything a degenerate group like ISIS needs, in the long run, it is more likely to reduce their power. Yet, it is important to note that the effect of access to oil on the group’s power in the long-run is not direct, as power could be affected by a vast array of factors. Nonetheless, access to oil is an important aspect. This is not to say that ISIS does not acquire wealth through other means. Their acts of human trafficking, looting as well as destruction and sale of artifacts also help the group acquire financial resources. Fortunately, the Iraqi Army recently declared victory over ISIS. Nevertheless, given the vast array of opportunities oil offers terrorist groups like ISIS, it is also very likely that they would wish to acquire such valuable resources in the future, suggesting that though they may appear to be losing ground now, largely due to the military operations undertaken by the U.S. coalition, their threat still remains. It is perhaps just a matter of time before they resurrect, after potentially gaining access to more valuable resources, if not cautiously monitored and prevented.